Below is list of additional income that should be added to your Indiana return:
If you claimed a deduction on a Schedule C, C-EZ, E, or F for taxes paid based on, or measured by income and levied at a state level by any state in the U.S., you must add this deduction back to your Indiana return. DO NOT INCLUDE PROPERTY TAXES ON THIS LINE.
Net Operating Loss Add-Back
Any net operating loss that was reported on Schedule 1, line 8 of your federal return, must be added back to your Indiana return. List the amount of the loss as a positive number. (you may still be eligible to claim an Indiana NOL deduction on your state return)
OOS Municipal Obligation Interest Add-Back
Interest earned from a direct obligation of a state or political subdivision other than Indiana and was acquired after 12/31/2011 is taxable by Indiana. Interest earned from an obligation held before 1/1/2012 is not taxable by Indiana.
Section 179 Expense Excess Add Back
If you figured IRC section 179 using a ceiling amount of more than $25,000, you must add back the difference between it and $25,000. Special rules may apply if the Section 179 expense is taken against property acquired in a like-kind exchange. See Information Bulletin #118 here.
Bonus Depreciation Amount
You must add back any bonus depreciation that was included in your federal adjusted gross income. To figure this amount, re-figure the net income (or loss) that would have been included in your federal AGI had the bonus depreciation not been used, then enter the difference which could be a negative or positive number.
Qualified Preferred Stock
"If an individual:
- Had losses from the sale or exchange of preferred stock in either Federal National Mortgage Association or Federal Home Loan Mortgage Corporation,
- treated the loss from the sale or exchange as ordinary income for federal income tax purposes in the year the loss had been incurred; and
- had any amount previously added back that not been allowed as a deduction,
the individual is permitted to continue deducting the loss not previously allowed as a capital loss. However, the amount allowable as a capital loss must be computed in accordance with federal limitations
on allowable capital losses." (IT-40 Booklet)
Current year conformity add-backs (positive and negative entries)
If you are not sure as to whether Indiana will adopt any of the federal legislation passed after January 1, 2023, that acts to modify federal AGI, you may add-back those items. In the event those items are adopted, an amended return should be filed to recoup the add-back(s).
For more information regarding the Conformity Add-Back, please see the IT-40 booklet.
Federal Repatriated Dividend Deduction Add-Back
Taxpayers should add back the deduction taken on federal Form 965, Line 17 if applicable.
Employer Student Loan Payment Add Back
If your employer paid any amount for your student loans and you excluded the payment from your federal gross income, add back the amount you excluded from your gross income. This amount must be added back regardless of whether your employer paid you the amount.
Meal Deduction Add Back
If you claimed a deduction for meal expenses with regard to food and beverages provided by a restaurant in computing your federal adjusted gross income; AND the deduction would have been limited to 50% of the meal expenses if the expenses had been incurred before Jan. 1, 2021, add back the amount deducted for federal purposes in excess of 50% of the food or beverage expenses.
Do not add back any amounts:
• Claimed as an itemized deduction for federal income tax purposes; or
• Any amount for which an exception to the 50% limitation was in effect for amounts paid before Jan. 1, 2021.
Student Loan Discharge Add Back
If you had a student loan discharged during the taxable year and you excluded the amount of the discharge from your federal gross income, add back the amount of discharged loans excluded from your federal gross income. If you were insolvent at the time of the discharge, your addback is reduced by the amount that would have been excluded for federal income tax purposes if you had chosen to exclude the discharged debt from federal gross income under IRC § 108(a)(1)(B).
Excess Federal Interest Deduction Modification
Subtract an amount equal to the amount as a deduction for excess business interest under IRC Section 163(j) in the year in which the interest was first paid or accrued. If you are deducting any business interest carried over from a previous year, add the amount of this interest deducted.
- State Section
- Additions to Income
For more information on these Add-Backs, please click here.